Could new EPA rule shut down West's biggest coal plant?

The Navajo Generating Station is the West's biggest coal-fired power plant. Located near the shores of Lake Powell, it supplies power to Arizona, Nevada and California. If new EPA rules go into effect, it could be forced to shut down. In Page, Ariz., Tuesday, July 17, 2012.

I believe that they could eliminate a great amount of whatever it is that they are accused of releasing into the atmosphere.—Navajo historian Wally Brown

PAGE, Ariz. — Controversy is boiling over the West's biggest coal-fired power plant, located just south of the Utah-Arizona border near the shores of Lake Powell.

Owners of the Navajo Generating Station say an Environmental Protection Agency proposal to clear the air in the region's national parks may push the plant into an unacceptable financial situation. They've indicated it could force a shutdown as early as 2017.

"The critical issue is the timing of it," said George Hardeen, a spokesman for the plant. "If the EPA requires it to be done within a short period of time, it becomes economically non-viable."

A shutdown of the plant would put nearly 1,000 people out of work on the Navajo Indian Reservation that is already deeply mired in unemployment and poverty.

Still, some Navajos support tougher pollution controls.

"I believe that they could eliminate a great amount of whatever it is that they are accused of releasing into the atmosphere," said Navajo historian Wally Brown, who operates a tourist attraction called Navajo Village near the plant.

The plant provides power to Arizona, Nevada and California. It's also the principal provider of electricity for the Central Arizona Project, which supplies water to the Phoenix area.

"It's one of the most reliable sources of electricity in the Southwest," Hardeen said.

The power plant is located just outside Page, Ariz., on land owned by the Navajo Nation. It operates under a long-term lease with the tribe that expires in 2019.

The future of that lease is at the heart of the controversy over pollution controls.

The owners insist they cannot spend more than a billion dollars on environmental improvements without a guarantee they'll be allowed to operate beyond 2019. The owners are several public agencies and utilities, including the U.S. Bureau of Reclamation, Tucson Electric Power and the Los Angeles Department of Water and Power.

The plant uses water from Lake Powell and coal from the Navajo Indian Reservation. Three trainloads of coal arrive each day. Eight million tons of coal are funneled into the furnaces each year. The plant and coal mine together employ about 900 workers. Roughly 90 percent are Navajo.

Critics argue the plant's emissions play a role in forming regional haze that often mars the scenic vistas in the Southwest. Proposed new EPA rules are expected to require installation of new pollution controls.

"Scientifically it will reduce nitrogen oxide by another 40 percent," Hardeen said. "But how much will be visible to the human eye is debatable."

The battle lines aren't exactly drawn in the sand yet, but threats of closure are being taken seriously. The owners fear being trapped by conflicting timetables of the EPA and the Navajo Nation.

They estimate it will cost $1.1 billion to comply with the proposed EPA requirements. The owners argue that if they spend the money by the supposed deadline of 2017, there's no guarantee the Navajo Nation will renew the lease beyond 2019. Without such certainty, the owners say they cannot approve such a large investment.

"I mean, you'd be putting a big expense out and not know if you'll be getting that expense back over time," Hardeen said.

Over the last four decades, three other initiatives have reduced pollution from the plant. In the early 1970s when the plant was built, precipitators were installed to cut fly-ash by 99 percent.

In 1991, President George H.W. Bush flew to the nearby Grand Canyon to proclaim a new sulfur-dioxide scrubber at the plant as a major step toward cleaning the air in the national parks.

"No one wants an environmental policy that permits the wanton destruction of our national treasures," Bush said on that occasion.

Just last year, the plant added controls that removed 40 percent of the nitrogen oxide.

The new EPA proposals are expected to require even deeper reductions in nitrogen oxide and particulates, possibly by 2017. Thus the dilemma for the owners: the cleanup deadline might arrive before the Navajo lease issue is decided.

With so many jobs at stake, would the Navajo Nation seriously consider not renewing the lease?

Brown, for one, thinks the original agreements didn't sufficiently compensate the Navajos for their air, water and coal. He doesn't advocate a shutdown of the plant but believes others could step in to run it.

"There are other companies that would be right there to take over," Brown said. "And we might be able to have a better agreement and better relations with them."

The battle is expected to heat up in the next few months. A final decision on whether to shut down the plant probably won't come for about a year and a half.